Individual Assignment - Dominos Pizza

1.0 OVERVIEW

Domino’s Pizza is the No. 1 Pizza Delivery Company in the world and the undisputed

pizza delivery expert. The Company has a unique business and operation model and is

a pioneer in the fast food industry. Since 1960, Domino’s Pizza has successfully

expanded from 3 outlets in the United State to 9,350 stores operating in seventy

countries. Domino’s operation in Malaysia and overseas uses the franchise model. The

parent company, Domino’s Pizza LLC is head quartered in Michigan, United State of

America. It maintains overall control on the sourcing and supplying of raw materials

to the master franchises and enforces quality of the service and products sold.

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2.0 HISTORY

The legend of Domino’s Pizza dates back to December, 1960 with the purchase of a

small pizza shop in Ypsilanti, Michigan by brothers Tom and Jim Monaghan. The

brothers bought the restaurant from friend Dominick DeVarti for USD500 cash and

assuming the stores USD8,000 debts. Neither Tom nor Jim had the intention of mak-

ing the restaurant business their career, but rather saw the opportunity as a part-time

venture to help cover the cost of their studies at the nearby University of Michigan.

By June the store was earning a profitable USD400 a week but briskly fell off when

students at the University went home for summer. Faced with the prospect of a slow

phase, Jim sold Tom his half of the business in 1961 and changed the name from Do-

minick’s to Domino’s. The same year, Tom decided to quit school to devote more

time to the business.

Aware of his lack of experience in pizza making and operations and management,

Tom spent much of his time visiting many similar pizzerias around the state acquiring

advice on operations and recipes. By the mid 60’s, Tom had restructured the interior

of the store, rearranged all areas and systems, ultimately improving the flow of work

in all facets of the operation from order-taking to delivery. Monaghan’s system was

reminiscent of those developed by the managers of White Castle Hamburger in the

20’s and the McDonald brothers in the 40’s. The implementation of this system for-

mulized the production process as a unified whole, and included the standardization

of materials, clever and thoughtful placement of equipment, and detailed division of

labor; all geared to achieve the continuous production of its limited product line. By

1967, Domino’s emphasis on uniform quality and rapid delivery proved a successful

system for operating a pizza shop and therefore provided opportunity for expansion

through franchising.

The company landed in Malaysia in September 1997. Launched by its founder, Tom

Monaghan himself, Domino’s Pizza became an overnight sensation. It was so well-

received that Domino’s Malaysia’s commissary was recognised in the Annual

Domino’s International Audit as the Best Commissary in Asia Pacific.

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Malaysia's bullish food and beverage industry coupled with Domino's promise of

quality food and delivery service was highly accepted and gained new customers

nationwide.

As at early January 2012, there are 77 stores operating all over Malaysia, with 51 in

the Klang Valley, 10 stores in Johor, 4 in Penang, 6 in Negeri Sembilan, 4 in Perak

and 2 in Melaka.

With the healthy growth in Malaysia, Domino's extended its presence to neighbouring

Singapore in 2009. There are currently 13 outlets operating in Singapore and growing

aggressively.

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Passionate about

winning

Passionate about

Quality

Passionate about

Service

Passionate about

relationships

3.0 Corporate Vision The Dominos Corporate Vision statement focuses on the following key areas:

• Being better than the competition.

• Ensuring a quality product.

• Providing excellent service.

• Creating lasting relationships with its employees and the communities within which it operates.

Figure 2 Corporate Vision: Dominos

A clear corporate vision ensures that the company and its franchises can work towards meeting common goals thereby increasing its business in a potentially virtuous cycle. Figure 2 show the graphical representation of the Dominos Vision. The overall global vision translates into specifics at a country level in a seamless manner so that the overall strategic vision is kept in mind at all times.

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4.0 Global Strategic objectives Strategic objectives adhere to the company‟s vision statement, Dominos‟ key strategic objectives are:

Targeted international growth – competitors. Menu expansion, vary price points, 24 hour delivery model – competitors. Use Company owned stores in the US and Australia as a test bed for new innovations – IT

Strategy. Increase investment in training and auditing of stores to provide a consistent service and

good quality of products – Human Resource Strategy. Allow master franchisees to apply their knowledge of the local market and cuisines –

Knowledge Management Strategy.

Directing :

Leading is also recognized to be an important management function. It basically covers up

leading and directing employees to attain the set objectives. The company possesses good

number of leaders that guides the workforce to move in a right direction. Leadership serves to

be an important concept that turns out to be helpful enough in carrying upon the tasks at an

effective mode.

Leadership

The leadership style practiced in Domino’s restaurants is autocratic and therefore crew mem-

bers are not involved in any decision making. It is also a fact that suggestions from crew

members are not welcomed as most of them are new. Crew members are young and work in

these restaurants during summer vacations and therefore cannot offer ideas to the leader.

Crew members are young and therefore motivated if they are paid wages on time and given

extra benefits such as lunch and transportation. This motivates the crew to work in spite of

the autocratic leadership. Autocratic style of leadership doesn’t fulfill the self esteem require-

ments reflected in Maslow’s hierarchy. However at Domino’s crew members get self respect

and also respect each other. Domino’s will not adopt another style of leadership as the man-

agement fears that a persuasive or democratic style will not deliver the goods, viz., delivering

quality food on time to its customers.

Organizing :

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Organizing is establishing the internal organizational structure of the organization. The focus

is on division, coordination, and control of tasks and the flow of information within the orga-

nization. It is in this function that managers distribute authority to job holders. in today’s so-

ciety it is important that management considers the employees and customers as the most im-

portant asset of the organization. Having a rigid structure undermines the creativity of the

employees, thus the culture of empowerment and delegation is what currently prevails in the

competitive environment. McDonalds uses the collaborative management approach which

connects all the global franchisees worldwide under the umbrella of single company name.

Management encourages the practice of working and assisting with each other’s franchisees

to deliver the best to their customers by coping up with external challenges and representing a

collaborative responsible culture. In order to ensure consistent quality, the standards are uni-

form for all franchises.

Thus a centralized structure prevails in terms of training programs, supplies and operations.

The formal structure at McDonalds divides the organization in the departments and every in-

dividual knows his tasks well at which he needs to be specialized. However, these standard

procedures do not give rise to bureaucratic rigidity in the organization; each employee is

committed to achieve their goals. The organizational structure chosen supports the perfor-

mance and is aligned with the strategy of the restaurant of providing consistent quality and

great service experience.

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Staffing :

Staffing involves hiring proper personnel that could do justice with the job. McDonalds pos-

sesses a good number of workers that are highly committed towards satisfying the customers

by meeting their needs and desires. It gives due attention towards retaining skilled and exper-

tise human resources. Customer’s contentment serves to be the sole motto for the organiza-

tion and it cannot compromise with it at any cost. Proper training is also offered to the em-

ployees so as to meet the requirements in a far better manner. With this, it becomes quite ef-

fective and helpful from the part of the employees to execute the tasks at an effective mode.

Customer’s needs are to be handled upon at an effective mode by offering the best possible

amenities to them. McDonalds Company offers Wi-Fi facility and hygienic environment to

the visitors. At the same time, customers are attended with full warmth and hospitality. Apart

from this emphasis in given upon collecting regular feedbacks, in order to hit the customer’s

approach accordingly. It is highly imperative to go for meeting customer’s requirements. On

the basis of feedbacks so assembled, better changes are also introduced that could turn out to

be highly approving and affirmative. Staffing requirements should be fulfilled by recruiting

the best possible candidates. The aim is to go searching for better potential in candidates who

would ensure that things are running and going on as well. Training sessions are regularly or-

ganized by the organization to make it easy for the employees to offer better performances.

Hired employees should show great dedication and devotion towards the task assigned to

them. McDonald’s image and status should be well-maintained as far as business practices

are likely to be carried out. The employees should also be provided with better compensation.

It would ensure that situations are under control and highly favorable. It is a must to see to it

that payment modes should be effectual enough in order to receive great outcomes. It is

highly important to mark better growth potential. Employee’s needs and requirements should

not be avoided as it can directly influence the company’s growth capacity. All this demands

for having proper check upon perks or salaries so offered to the employees.

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Objectives of Recruitments and Selection

Domino’s recruits dynamic and talent people to meet with customers’ satisfaction and keep

their reputation at high position.

To fill up vacancies for running business

To ensure equal opportunity.

Promotions Planning

The Prescient-planning tool manages promotions, which substantially increase the supply

chain demand for certain products. Dominos plans promotional forecasts by looking at 4

months of historical and internal information. The Prescient system contains a library of

promotion profiles and real-time analysis of the current period, and can overlay new

knowledge from the corporate marketing department that is likely to influence the new

promotion. Based on this data, it provides recommendations for promotion adjustments

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PizzaSide OrdersBeverages30-Minutes Delivery Guarantee

15-Minutes Take-Away Guarantee

Free Delivery Service

Discount Coupon for future purchase

Credit Card payment for online orders

5.0 PRODUCTS

Exhibit 4.1 Domino’s Pizza Customer Benefit Package

Domino’s Pizza offers a wide range of meals to its customers. They offer variety of

pizza, pasta, side orders and beverages. They have 5 unique pizza crusts i.e. Classic

Hand Tossed, Crunchy Thin Crust, Cheese Burst Double Decker, New York Crust and

Extreme Edge to satisfy Malaysian customers’ appetite.

Exhibit 4.2 Domino’s Pizza 5 unique Pizza Crust

Domino’s Pizza also offered numbers of topping such as Ultimate Hawaiian, 7-Meat

Wonders, Meatasaurus, Prawn Passion, Chicken Perfection, Tuna Extreme, Prawn

Sensation, BBQ Chicken, Aloha Chicken, Extravaganza, Classified Chicken, Plain

Cheese, Beef Pepperoni, Chicken Pepperoni, Classic Chicken, Flaming Tuna, Meat

Mania, Seafood Delight, Spicy Sambal, Spicy Sausage, Tuna Temptation, Vegie Fiesta

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and Vegie Galore. Domino’s Pizza also allowed their customers to customize their

pizza by offering 2 options i.e. Make Your Own and Half & Half.

Exhibit 4.3 Domino’s Pizza delicious Specialty Pizza & Customize Pizza

Domino’s Pizza comes with 3 Signature Pizza Sauces such as Domino’s Signature

Sauce, Spicy Sambal Sauce and Top Secret Sauce.

Exhibit 4.4 Domino’s Pizza signature Pizza Sauces

Domino’s Pizza also serve varieties of side orders such as Chicken Wings BBQ,

Chicken Wings Hot & Spicy, Spaghetti Bolognese, Chicken Lasagna, Creamy Custard

Puff Desert, Garlic Twisty Bread, Garlic Cheese Onion Rings, BreadStix, Banana

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Kaya Desert, CinnaStix & Icing and Chocolate Lava Cake.

Domino’s Pizza also offers Coca-Cola, Sprite and Fruit Tree Fresh Apple & Aloe Vera

for its beverages.

The above products are considered primary goods for Domino’s Pizza and these

products will ensure that Domino’s Pizza customer’s needs of foods will be fulfill.

Domino’s Pizza has introduced its Unique Selling Preposition (USPs) which

includes:-

5.1 30-Minutes Delivery Guarantee! - Domino's is the only pizza

company that guarantees customer’s order will arrive within 30

minutes or Domino’s will give its customer a free Regular Pizza

voucher;

5.2 Product Satisfaction Guarantee - Domino's guarantees satisfaction!

Their pizza and side orders are guaranteed to be hot, fresh, and great

tasting when they arrives at customer’s doorstep, otherwise Domino’s

will replace the product or refund customer’s money.

5.3 15-Minute Take-Away Guarantee - Domino's guarantees customers

will receive their Take-Away orders within 15 minutes or Domino’s

will give them a free Personal Pizza voucher.

5.4 Free Delivery - No extra charges for delivery to customer’s doorstep.

Domino’s Pizza also introduced discount coupons for its customers’ future purchase.

This method is really works for Domino’s Pizza where they tie-up their customer with

the attractive offer for future purchase. This will also create loyalty among Domino’s

Pizza customers.

Domino’s Pizza also allowed their online customers to pay their orders using credit

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card where previously they only accept cash payment for the online purchase.

The above services can be considered as peripheral services where it will benefit

Domino’s Pizza customers and will add confident for the customers to choose

Domino’s Pizza rather than other Domino’s Pizza competitors such as Pizza Hut and

Papa John.

Exhibit 4.5 Domino’s Pizza Unique Selling Prepositions (USPs)

Further to the above Domino’s Pizza also obtained a Halal Certification for all its

products from Jabatan Kemajuan Islam, Malaysia (JAKIM) which will add more

confident to Domino’s Pizza current and future customers.

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6.0 Planning and Control

Goldratt’s eory of Constraints (TOC) applied to Dominos: The maximum capacity of baking pizzas simultaneously is 24, which is a

bottleneck in case of getting a bulk order, or during peak demand. In case of excess demand on one outlet, the load should be shared with the

nearest outlet. In case the load is persistently high on a particular outlet, then the baking capacity should be upgraded.

Figure 23 Production Constraints: Dominos Store

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Figure 24 Dominos Demand Strategy

Demand Forecasting Dominos uses the „Prescient‟ distribution-planning suite for its inventory and demand planning (forecasting). With the help of Prescient, Dominos created a solution called „Matched receipts to demand module‟ which maximizes their overall supply chain efficiency by facilitating „lean‟ operations.

The prescient-planning suite monitors inventory and determineswhen a distribution centre needs a product. It optimizes the orders by looking at the minimum material required for each product, based on the existing inventory levels at the distribution centre.

The planning suite receives requests from its retail stores through the company‟s PeopleSoft Enterprise Resource Planning (ERP) system; it aggregates these requests to establish replenishment requirements. It also considers any constraints such as dollar amount per purchase order – the next order is then based on the prior order.

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VALUE AND SUPPLY CHAIN

It is important to consider how a customer need drives Dominos to create the product.

The customer need that drives the entire value chain is the need for a dependable take

away restaurant, reasonably priced hot quality food and variety that suits the local

palette.

Exhibit 4.1 Domino’s Pizza Value Chain

Dominos has focused on these key customer needs throughout the value chain, and

has not allowed any digressions in this area unlike other competitors who have

evolved a mixed model of full service restaurants and takeaway outlets, or a hybrid

combination of both. This has diluted their strengths in the segment Dominos focuses

on - Takeaway / Home delivery. Its global operational model allows for lean stores,

well-trained staff and flexibility at a country level to customize menus to suit

customer tastes. Operational requirements have prompted the use of technology to

make the customer experience more enriching, it has a history of firsts – they were the

first to use TV as a distribution channel, an online tracking system that allows

customers to track the pizza order and a proprietary point of sale system. A

combination of the Company level strategy and the Operational Strategy has resulted

in Dominos having a reputation for reliability and consistent pizza quality – these

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strategies have ensured that Dominos continues to meet its customer needs.

For instance, Domino’s Pizza is committed to leading the industry in product quality

and using the best ingredients for its customers. Domino’ Pizza also includes local

flavours into their menu as one of the key things that Domino’s Pizza do to appeal to

the local market, creating tasty and innovative combinations.

Dominos Pizza has adopted the Make-to-Stock Approach for its Supply Chain

Management. The company supply chain is supports lean production and is based on

just in time stock management and stock control.

Dominos has an innovative supply chain model that ensures all purchases are

managed centrally across all franchises around the world. The core entity, which runs

the supply chain network, is called Dominos supply chain services – a fully owned

subsidiary which supplies the dough, raw materials (the condiments, and ingredients

that go into the food products), the kitchen equipment / machinery.

This entity supplies to all the master franchises – effectively giving the company a

few key advantages:

(1) With a centralized buying department, the company is able to leverage its

buying power, and is able to negotiate the best costs for its purchases. This also

ensures purchases on a scale which makes suppliers want to tie into the

Dominos supply chain services. For instance Coca-Cola is integrated into

Domino’s supply chain network, and is seen more as a partner rather than a

supplier; this was made possible because centrally Dominos has agreed to only

sell Coca-Cola products at all its outlets around the world.

(2) Consistency and Quality of products across the board - Since the sourcing is

centralized, this ensures consistent quality of food products used, and similar

machines / kitchen equipment that make training easy for staff.

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(3) Economies of scale: Dominos is also able to use its large buying power to hedge

better costs when commodity prices fluctuate; it also gives it a better bargaining

power with suppliers.

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7.0 OPERATIONS STRATEGY

Other fast food chain such as Pizza Hut which operates conventionally, needs a nice

and big restaurant with an attractive layout to impress their customers since their main

business is for dining-in customers compared to Domino’s Pizza which main business

is pizza delivery. As such, Domino’s Pizza does not need huge capital to start.

Domino’s Pizza just needs a strategic place and a well built user friendly and

convenience website to attract customers.

Dominos operations strategy mainly focuses on the providing high service quality to

the customer:

7.1 Minimize operations cost: To minimize the operating cost by improving the effi-

ciencies and process at the stores.

7.2 Strategic store locations to facilitate the delivery service: To leverage the strategic

location of the store in order to facilitate quick service to the customer and maxi-

mize the revenue.

7.3 Production oriented store designs: To utilize the production oriented store design

in order to facilitate efficient production and quick service to the customer.

7.4 Efficient order taking, production and delivery: To execute an efficient opera-

tional process that includes order taking, pizza preparation, cooking, boxing and

delivery.

7.5 Use of Domino’s PULSE point-of-sale system: Use of Domino’s PULSE system

to improve operating efficiencies, provide corporate management with easy access

to financial and marketing data and reduce time consumption and expenses.

7.6 Product and process innovations: To promote an innovative culture that increases

both quality and efficiency.

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7.7 A focused menu: To maintain a focused menu that is designed to present an attrac-

tive quality offering to customers, while minimizing order errors, and expediting

the order taking and food preparation processes.

7.8 A comprehensive store operations evaluation program: To utilize a comprehensive

store audit program to ensure that stores are meeting both as the expectations of

the customers.

The Performance Prioritizing would help Dominos in prioritizing its operational

strategies based on the order-winning criteria and the current issues it faces in relation

to the competition.

1. Dominos invests in promotional strategy to a greater extent as compared to other

food chain outlets. It offers many discount coupons to attract customers. Discount

offers do help to some extent in attracting customers but too many discount and

promotions tend to lower the brand image. So Dominos need to cut down some

expenses in that section which will not affect its sales.

2. Dominos has got an excellent unmatched home delivery service through which it

stays ahead of its rivals. The ‟30-minute luxury‟ of Dominos has given the brand

a strong image among the customers. This gives Dominos a clear balance between

its competitors and customers.

3. Dominos need to improve its product quality in order to maintain reputed. It needs

to emphasize on the pizza quality and prioritizing all aspects that relate to the cus-

tomer. For example, Pizza Hut specifies the calories consumption in each pizza.

This reflects the brand concern for the customer. So Dominos should also initiate

some measures which would foster the “emotional connection” to its customers.

4. In order to increase the service to customers, Dominos should ensure speedy de-

livery of pizzas to customers. For this, Dominos need to work on its establishment

process design. There should be enough space and staff for service and extra ma-

chines to handle any machinery failure during peak periods.

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TECHNOLOGY

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Domino's Pizza launches Malaysia's first fast food on line ordering portal which

recognized by the Malaysian Book of Records in 2003. By introducing the on line

ordering portal, Domino’s Pizza has increase their potential customer base as the

portal can be reached anywhere, anytime.

In 2010, Domino’s Great Pizza Service (GPS) pizza tracker system was introduced at

all Domino’s Pizza outlets in Malaysia. This first-of-its-kind system in Malaysia

enables customers to track their pizzas at every stage of the delivery process.

Exhibit 6.1 Domino’s Pizza GPS

Recently, other fast food chain such as Pizza Hut, Mc Donald’s and Kentucky Fried

Chicken has introduced their on line ordering portal to compete with Domino’s Pizza.

In striving to attract more customers in an easier and more efficient manner,

Domino’s placed great importance on sales via its technology platform. Domino’s has

witnessed an ongoing trend of pizza orders coming in electronically, rather than over

the phone.

In contrast to telephone orders being placed to the stores, the online system requires

less labour, and causes fewer mistakes. In addition, Domino’s online sales system has

the ability to track customers’ preferences and past orders.

8.0 CONCLUSION

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Domino’s Pizza is recognized as the world leader in pizza delivery. The company’s

fortune in the industry reflects their active arrival as the first chain to offer delivery to

the consumer. Since Domino’s focused its business solely on delivery, they were also

the driving force behind pizza delivery technology. Domino’s Pizza has achieved

success in creating the pizza box that has become a standard for the pizza industry.

Domino’s dominated the market with the delivery concept until its main competitor

Pizza Hut began experimenting with delivery in 1999. Domino’s is also commonly

known for creating the “30-Minutes Delivery Guarantee” for its pizza delivery.

Domino's is the only pizza company that guarantees customer’s order will arrive

within 30 minutes or Domino’s will give its customer a free Regular Pizza voucher.

This slogan helped the company attract customers. Domino’s has benefited greatly

from implementing the first truly effective home delivery system.

9.0 BIBLIOGRAPHY

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1) http://www.wikipedia.org

2) http://www.dominos.com.my

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